Mumbai/Chennai, India, November 23,
2009—IFC, a member of the World Bank Group, will provide a trade financing
line of up to $51 million to India’s Kotak Mahindra Bank to help support
small and medium enterprises that have suffered reduced access to finance
due to the global financial crisis.
IFC’s trade finance facility will provide Kotak Mahindra Bank with risk
coverage and access to a global network that will help grow the bank’s
trade finance business. The network facilitates transactions in challenging
markets, promotes competitive financing, and builds correspondent bank
relationships with new institutions at low risk. This is the first bank
IFC has supported in trade finance in India under its Global Trade Finance
Lars Thunell, IFC Executive Vice President
and CEO, said: “IFC’s support to Kotak Mahindra Bank reflects our commitment
to help businesses in India and other emerging markets overcome the effects
of the global economic crisis, including by expanding the availability
of trade finance.”
The trade facility will improve Kotak’s
ability to provide short-term trade funding for smaller businesses, which
is vital given their reduced access to foreign currency financing amid
the ongoing global financial crisis.
Dipak Gupta, Executive Director, Kotak
Mahindra Bank, said: “This important transaction, with our long- standing
partner IFC, will help us provide a wider base of short-term foreign-currency
trade finance products.”
After the global economic slowdown,
the scarcity of trade financing has posed a particular economic risk to
low- and middle-income countries. IFC, working with its partners, has sharply
increased its trade financing efforts over the last year.
IFC is the only international financial
institution focused exclusively on the private sector, the engine of sustainable
development in emerging markets. Along with IBRD, it is currently seeking
a capital increase to strengthen its ability to create opportunity for
the poor in developing countries—including by supporting trade financing
benefiting small businesses in India.
To learn more about IFC’s activities in South Asia, visit www.ifc.org/southasia.
IFC, a member of the World Bank Group, creates opportunity for people to
escape poverty and improve their lives. We foster sustainable economic
growth in developing countries by supporting private sector development,
mobilizing private capital, and providing advisory and risk mitigation
services to businesses and governments. Our new investments totaled $14.5
billion in fiscal 2009, helping channel capital into developing countries
during the financial crisis. For more information, visit www.ifc.org.
About Kotak Mahindra Bank
Kotak Mahindra Bank was established
as a private sector bank in India in 2003. It offers corporate and commercial
banking products and other retail, capital markets, and asset management
products. The bank has a network of over 200 branches of which up to 75
offer international trade finance products servicing midmarket and small
and medium enterprises. Kotak Mahindra is organized along business lines
of corporate and wholesale bank, retail bank, and treasury that are serviced
through the transaction bank.